$550K in state incentives for Buffalo Trace get preliminary OK

Distillery planning $2.2M expansion

By Ryan Quinn, Published: February 12, 2014 4:28PM

Underscoring the ongoing bourbon boom — and the government’s taxpayer support for it — a proposed renovation and expansion at Buffalo Trace Distillery received preliminary approval Wednesday for up to approximately $550,000 in incentives.

The decision, by the Kentucky Tourism Development Finance Authority, was unanimous. The incentives are related to a roughly $2.2 million expansion of the distillery’s touring, tasting, retail, meeting and event facilities.

That proposed expansion is separate from Buffalo Trace’s distribution warehouse expansion, for which the Frankfort City Commission is likely to approve de-annexation this month.

That expansion would currently cross from Franklin County’s jurisdiction into the city. In exchange for a tax-sharing agreement with the county, the city is moving to de-annex in order to remove regulatory confusion.

Less than an hour after that incentive was approved, Beam — which had also been considering building in Woodford County — announced it had chosen to construct on Leestown Road.

Bourbon production has increased by more than 50 percent in the last decade and 120 percent since 1999 — and Kentucky accounts for 95 percent of worldwide bourbon production — according to a 2012 report by the Kentucky Distillers’ Association.

At Wednesday’s meeting on Buffalo Trace’s new expansion, Meredith M. Moody, marketing services manager for the distillery, said the number of visitors seeking tours increased more than 30 percent last year. The influx is limiting how many events the distillery can host simultaneously, she said.

If members of the tourism authority grant final approval for the incentives, Buffalo Trace will be able to recoup over a 10-year period sales tax payments totaling up to 25 percent of the project’s cost, said Gil Lawson, a spokesman for the Tourism, Arts and Heritage Cabinet.

That would be a maximum of $50,000 a year, but could be less depending on the distillery’s sales.

“We don’t write ‘em a check until they build the project, open the doors and start selling stuff, generating income for them and for the state, because we get tax revenue from that,” Lawson said.

Lawson said there will now be a study of the distillery’s application for incentives to make sure it meets the requirements — including showing a net positive fiscal impact for the state that exceeds the possible incentive amount.

Such studies generally take six to eight weeks, and final approval can occur after the results are presented.

A project must exceed $1 million to qualify for incentives.

Lawson said the expansion will be 11,200 square feet and will include an expanded tasting area and enlarged gift shop.

Moody said the project will include renovating the visitors center’s second floor — currently used as storage and part of the bottling operation — and the first phase of expanding the Dickel Building, which has been empty for several years but is planned to host meetings and events.

She said the distillery aims to finish the visitors center expansion this year, but she didn’t have a timeframe for the Dickel Building expansion. She said the visitor’s center was built in the late 19th century, and Buffalo Trace will endeavor to complete the renovations without endangering the distillery’s status as a National Historic Landmark.

Want to leave your comments?

So, this year we the taxpayers are contributing a total of 3/4 of a million dollars to two private multinational corporations that produce the dangerous, addictive and lethal drug alcohol that is the third leading cause of human death in the nation. We put our heavily biased blinders on and laud the unanimous decision by the Kentucky Tourism Development Finance Authority to give the public's consent and tax support to the worldwide distribution of this locally produced poison, because as everyone knows, we just aren't manufacturing and trafficking enough alcohol from Franklin County lately.

We cheer the "good news" that "Bourbon production has increased by more than 50 percent in the last decade and 120 percent since 1999 — and Kentucky accounts for 95 percent of worldwide bourbon production — according to a 2012 report by the Kentucky Distillers’ Association." Yipee, these drug dealers are raking in record profits off of the death and misery that they hawk directily to our children...but it is legal, so therefore, it is OK! Then we cringe in horror and circle the wagons in a defensive posture when the government claims that we have a heroin epidemic, which is laughable when you look at the stats and see how tiny the minority of people that use the stuff is. "Scourges" and "epidemics" are hyperbolic terms when describing things that effect tenths or hundredths of 1% of the population.

Fifty percent of the adults in America are current regular drinkers, 39% of the kids ages 12-17 have had at least one drink in their lifetimes and 63% of full time college students reportedly used alcohol in the past month. According to the CDC, there are approximately 79,000 deaths attributable to excessive alcohol use each year in the United States. This makes excessive alcohol use the 3rd leading lifestyle-related cause of death for the nation. In the single year 2005, there were more than 1.6 million hospitalizations and more than 4 million emergency room visits for alcohol-related conditions. And this doesn't even account for all of the deaths from auto accidents and alcohol related violent crime.

I have posted a National Institute of Health comparison between the known and undisputed health impacts of alcohol on the human body that dwarfs even the demonized heroin (do I need to post that here again...cause Iwill!). KY is second in the nation in per capita prescription drugs at 16.7 for each and every one of us. We smoke cigarettes than ANYBODY and have the mobidity rates to prove it.

WE are literally swimming in perfectly legal deadly drugs...and yet we pay the Sheriff nearly $2 MIllion of our hardearned tax dollars a year to round up a little group of rednecks who were driving their pick'em-up trucks to Floridee and going doc shopping for pain pills to come back here and sell them by the pill to drunk chicks in bars to mix with their shots of Yager. And people applaud their efforts becasue this is such a big deal! Really? Only idiots think so.

Hypocrisy is a form of ignorance, yet most of us are too biased to see it. They gag on the gnat and readily swallow the camel. We are spending far too much money on promoting the local production and trafficking of one of the most dangerous drugs known to man, and pretending that it is just a harmless business, like a cottage industry or funiture manufacturer. We are spending far too much time, energy and MONEY on trying to find out why people take drugs, but in fact, what we are doing is trying to find out why some people are taking some drugs that we disapprove of. No useful answers can come out of that sort of inquiry as the question is improperly phrased.

Brunouno

February 13, 2014 7:05PM

Some drug dealers get everything that the want!

anonymous_1304

February 13, 2014 3:21PM

From past experience in the ECO DEV Cabinet

New plants in Kentucky have been given billions of state incentives. over the years. Thats part of the problem with the budget. No tax on industry for a period of time (two years)

There has to be some kind of relief for states and local governments. The corporations have found they can leverage for handsome tax benefits and that is not about to change. Each state including Kentucky continues to offer big incentives. Part of the agreement with new industry for tax breaks is tied to that knowledge. They can get the tax breaks if they hold out. New plants pit town against town, state against state.

In the state agreement industry is to be at full employment of their projectons within two years.

If not they are not they are charged a fee for jobs they did not produce in order to get the incentives. I never once, saw anyone in the Economnic Dev Cabinet, ever check the records to see if industry held up to their agreement.

Many jobs were not produced over the years and the state did nothing to collect any money, even after the factory closed or moved out of the United States.

At this point it looks like there is no way to enforce this agreement without getting a bad image with future prospects. This is case of previous decions come back to bite you in the butta.

jas

haightashbury

February 12, 2014 11:37PM

We've moved on to where the creation of full-time jobs w/benifits are no longer tied to receiving incentives and isn't part of benchmarking the company. Since Ryan Quinn didn't state that jobs will be created, it could mean even if the distillery eliminates a few jobs, the incentives remain valid. There's also a bill that will pass which reduces corporate tax for distilleries. There comes a point unless a company is maintaining their employment level and/or creating jobs, they're not eligible for squat. Dang they got foilks on the payroll who's job it is is to make sure they pay as little in state/federal taxes as allowed under out aniquated tax laws.